Recently, the futures and spot markets for urea have been operating weakly, with futures prices continuing to decline and spot market prices experiencing scattered and small drops. As of now, the weak state has been maintained for a long time, and there has been no turning point after rounds of decline; The prices of phosphorus and potassium fertilizers have experienced varying degrees of increase in the early stages, with phosphorus fertilizer prices remaining high due to the support of raw materials such as sulfur and phosphate ore. This week, due to the impact of policies, the confidence of ammonium fertilizer enterprises has been dampened, and local quotations for ammonium fertilizers have declined; Shortly after the rise in potassium fertilizer prices, trading slowed down and there were signs of loosening in some areas. As a result, the pressure on the compound fertilizer market, which was originally expected to take over, appeared. Due to the impact of the further decline in raw material fertilizer prices, the price increase may become a feint, and an "emergency brake" has to be applied. Among them, the performance of urea is a key factor affecting its trend.

At present, the overall urea market is mainly stable with a small to medium decline, but the effect of price reduction to attract orders is average. The market trading atmosphere is still weak, and the upstream and downstream markets are relatively stagnant. Cautious sentiment dominates the market, and procurement is inevitably pushed forward according to demand. From a price perspective, the overall ex factory price in China is still concentrated around 1700-1800 yuan (ton price, the same below). For example, the mainstream ex factory price of urea in Shanxi is 1720 yuan, with some high-end listings priced at 1820 yuan. The mainstream ex factory price of urea in Northeast China is around 1830-1888 yuan, and the mainstream ex factory price of urea in Shandong is around 1760-1800 yuan; However, the progress of new order transactions is not ideal, and procurement is mainly based on essential needs, with some areas still experiencing a situation where there is a price but no market. In addition to paying attention to changes in supply and demand, the production progress and policy aspects of new urea production capacity are also key concerns in the later market.

From a supply perspective, some gas head urea enterprises in the Southwest and Inner Mongolia regions have recently entered the winter shutdown and maintenance stage due to gas restrictions, while a few other enterprises have not yet started operating at full capacity. However, the overall supply is still sufficient. According to statistics from China Fertilizer Network, the daily production of urea is about 182000 tons; At the end of the month, there will be new urea production capacity ready to be put into operation in some areas, and the supply will gradually increase; In addition, the recent performance of liquid ammonia market has been weak, with prices consolidating at a low level and obvious supply-demand contradictions, lacking significant support for urea in the production focus.

From a demand perspective, the industrial and agricultural demand for urea is light, with scattered demand in agriculture and on-demand procurement in industry. At present, the production of large compound fertilizer factories is at a low level, with nearly 30% according to statistics from China Fertilizer Network. The demand for urea is limited, and the progress of on-demand procurement is maintained. However, the price of small nitrogen fertilizer ammonium chloride is running at a low level, and some compound fertilizer factories are affected by cost pressure and have purchased ammonium chloride to replace some urea; Large and medium-sized traders have a low acceptance of the current price of urea, and the overall reserve progress is slow. They maintain a rhythm of reserving or supplementing at low prices. In addition, there are certain sources of goods that have not been fully digested in the grassroots market or platforms, and some urea enterprises also have certain inventory pressure. In order to reduce inventory pressure, it is inevitable that there will be a price reduction and order taking market; Furthermore, with the current restrictions on urea exports and no signs of policy relaxation, the supply pressure in the domestic urea market can only be absorbed domestically.

However, from a cost perspective, coal prices have decreased slightly in November, but urea prices are already relatively low. As a result, urea companies are limited by the impact of gas, and cost pressures have increased. Therefore, under cost support, urea prices are unlikely to have significant downward space. In addition, grain prices are lower than the same period in previous years, and the willingness to prepare fertilizers and planting enthusiasm in grassroots markets have decreased.

Overall, the supply and demand in the urea market are relatively balanced, but the supply has remained high for a long time, with limited orders from enterprises and slow progress in following up on new orders. The overall trend is mainly weak; Due to fluctuations in costs and the futures market, prices are inevitably subject to slight fluctuations.